13 Ways Real Estate Decision Makers Can Impact Housing Affordability

Real estate is going through a period of increasing costs that are negatively affecting both renters and sellers. However, leaving it in the hands of the authorities to make the right decisions might not be enough. As a decision maker in real estate, you should take a proactive role in managing these issues that affect the industry.

Saying that you want to make a change and doing so are two completely different things. To help real estate decision makers figure out what they can do to influence the rising costs that affect all stakeholders within the industry, 13 professionals fromForbes Real Estate Councilshare their ideas below.

Real Estate Council members offer strategies on how leaders can take a proactive approach to the affordability issues in housing.

Photos courtesy of the individual members.

1. Work With Local Authorities

Housing affordability is a big problem in many parts of the country. The solutions to providing affordable housing often tend to be local in nature, therefore it’s important for decision makers to work closely with local housing authorities, zoning boards, etc. Tailoring housing options to meet the needs of local residents provides a very direct way to solve this crisis. –Mark Tiefel,Capital Equity Group, Inc.

2. Help Update Zoning Laws

One way to make housing inventory more affordable is to adjust zoning laws. This can increase housing inventory levels or introduce other types of housing options such as tiny homes. Regulators and real estate decision makers should partner to modernize their cities for the needs of tomorrow. –Zachary Maurais,Sunroom

3. Create More Inventory And Options

Decision makers can approve accessory dwelling units (ADU). For homeowners, these independent units can be built on their parcel and allow for other generations, renters or other purposes. ADUs typically have their own kitchen, bathrooms and bedrooms and are not costly to construct. They are a highly designed feature for many current buyers, and building them can create more affordable rental inventory! –Jennifer Anderson,Anderson Coastal Group

4. Buy Older Spaces And Renovate

Prices are starting to rise in a meaningful way to deliver a product that is both affordable, feasible, but at a higher quality. Look at value-add multifamily and older apartments in highly attractive areas that need renovations. Upgrading aspects of the space will allow for good profit from a rental increase standpoint, but still be much lower than Class A apartments. –Ari Rastegar,Rastegar Property Company

5. Work To Cut Down Costs

Affordable housing is becoming less and less affordable, especially in markets like Houston which lack true B-class products. We’re beginning to focus on how to build brand new “affordable” housing and are able to get costs down to below $100/ft all-in. This allows us to have a nice product to own, as well as provide much more affordable rents than the typical A-class luxury we see elsewhere. –Feras Moussa,Disrupt Equity

6. Embrace Novel Concepts In Homeownership

For years we have pulled and stretched the capabilities of a mortgage, but lowering down payments or extending terms is not solving our affordability problems. Maintenance, repairs, taxes, insurance and other costs impact long-term affordability. Decision makers need to work with innovative companies whose novel ideas can improve affordability on closing day and every day thereafter. –Todd Sherer,Fleq

7. Focus On Multifamily Workforce Housing

Affordable multifamily workforce housingcan be a solution. More people in the U.S. are looking for affordable housing amid rising home prices. Millennials are strapped with debt and even high-income earners are prioritizing finances over luxury living. This type of housing in secondary cities offers comfortable living close to highways with a strong economy. Its popularity is growing among all generations, including investors. –Don Wenner,DLP Real Estate Capital

8. Create Jobs As Well As Homes

People in real estate can assist not just by creating more affordable residential units, but by developing and building commercial properties in gentrifying areas. We need to attract more Fortune 500 businesses and real low-and middle-income jobs into these communities—not just retail jobs. This would make all the difference. People should not need to commute for hours to their jobs. –Heidi Burkhart,Dane Real Estate

9. Offer Homebuyer Rebates

Many homebuyers have the credit and the job to purchase a home. However, most of them lack sufficient savings for a down payment (3.5% to 5%). According toStatista, the average home sold for $385,000 in 2018, meaning that the average buyer needs $13k to $19k for a down payment. The real estate industry has the authority to lower this expense to help more buyers by offering them ahomebuyer rebate. –Bobby Bryant,Ask Doss

10. Provide Discounts For Value

We are providing rent discounts to local artists, entrepreneurs and restaurant workers in return for them creating value, content and recommendations for our properties. Oftentimes they are our best content creators. We want to keep local workers, residents and leaders living and working in our downtown areas and seek to provide options and discounts for them to create value, too. –Jason Duff,Small Nation

11. Educate Your Customers

Educate your customers to become a smart renter or homeowner. A smart renter or homeowner can understand the current condition of the housing market, affordability and housing legislation such as rent control. Smarter customers also understand what their money is worth in certain cities. This can have an effect on the market itself, as smarter renters and owners decide where to spend their money. –Chuck Hattemer,Onerent

12. Take Good Care Of Your Residents

As property managers, our goal is to create happy homes and healthy investments and that extends beyond fulfilling repairs and maintenance requests. We’re developing a financial fitness training program that enables residents to obtain a bridge loan to help them pay rent if facing challenges. It even encourages them to move out of renting and into pursuing the “American Dream of Homeownership.” –Doug Brien,MYND Property Management

13. Focus On Rentals Near Colleges

As an investor, you can focus your marketing efforts to find large single-family residences near universities to convert them into affordable student housing complexes. Younger students have no problem renting a single room and having shared common space. This strategy allows you to offer cheaper housing options for students while increasing your ROI on an investment property. –Mike Hambright,FlipNerd.com